Reference and Legal Notices > Accounting Primer > The Accrual Principle > Bad Debts

Bad Debts

Accounting Primer Topics

Some customers may not pay their bills. In this case, the asset, Accounts Receivable, turns out not to have been an asset at all. When this happens, you credit Accounts Receivable and the customer's account with the amount of the bad debt, and debit an expense account, Bad Debt Expense.

Related topics

Accounts Receivable

Timing of Revenue Recognition

Matching Principle

Accrued Expenses

Accrued Liabilities

Accrued Revenues

Deferred Revenue

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